On the eve of the birth of her first child 12 years ago, Joan Hangarter bought an insurance policy that would pay her a monthly benefit if a disability ever prevented her from working as a chiropractor.
Hangarter kept up her end of the bargain, sending in monthly premium checks for more than seven years that totaled more than $3,000 annually. When a painful joint condition forced her to quit her $100,000-a-year practice in 1997, she began collecting her $8,100-a-month disability benefit. But after 18 months, her insurance company, now part of UnumProvident Corp., canceled her payments, declaring that she was no longer disabled.
Now a divorced mother with two children, Hangarter, 53, has struggled for more than three years to get by without the payments. She lost the home she was about to buy when UnumProvident cut her off. The family was evicted and for a time lived on welfare.
Hangarter sued and this year won a $7.67-million jury verdict. The award was upheld Wednesday by a federal judge in San Francisco. The company is appealing.
Meanwhile, the Novato, Calif., woman who was so proud of the home and lifestyle she once provided for her family recently filled out school free-lunch applications for her son and daughter and begged the local youth softball and soccer programs to let them play for free.
"This company caused my worst nightmare to come true," she said. "They are hurting people. They are destroying people's lives."
Hangarter is one of many policyholders across the country who blame Chattanooga, Tenn.-based UnumProvident for cutting off their payments and plunging them into hardship and despair.
The nation's largest seller of disability insurance is fighting scores of lawsuits that accuse it of using improper hardball tactics to cut legitimate claims in an effort to boost its bottom line.
In upholding Hangarter's award this week, U.S. Magistrate James Larson ordered the company to refrain from many of the tactics alleged in the suits, including using biased doctors to make assessments, spying on policyholders' activities and shredding claims information.
J. Christopher Collins, UnumProvident's senior vice president and deputy general counsel, accused plaintiffs' lawyers of "demonizing" responsible claims management practices.
"Our claims decisions are made within the context of a sound, fair process that we have worked hard to build," the company said in a statement. "Still, we can and do make mistakes. And when we become aware of an error on our part, we work urgently to correct the situation."
